News

Published on
Dec 21, 2017

German court upholds federal ban on iGaming

The Federal Administrative Court of Leipzig has ruled that Germany's prohibition of online casino, scratchcard and poker games is constitutional, despite the ongoing impasse in the awarding of sports betting licences.

This has prompted critics of the State Treaty on Gambling to point to the ruling as confirmation of the lack of effective regulatory controls for gambling in the country, renewing calls for an overhaul of gambling laws.

The ruling centres around two unnamed operators, licensed in Gibraltar and Malta, who offered online poker, scratchcard and casino games in Germany without a local license. One of the operators also offered sports betting, although it had not applied for a federal sports betting concession.

The two operators had successfully appealed against efforts to block them from operating in Germany in the Regional Court of Appeal in Baden-Württemberg. That court accepted their justification that such a ban was "arbitrary" and that the lack of enforced sports betting regulations effectively allowed them to continue their activities in the country.

However, this ruling has been overturned by the Leipzig court, which stated that as neither company had applied for a sports betting licence, they could not use the ongoing delay in implementing the State Treaty as justification for offering iGaming products.

The Federal Administrative Court also denied that the ban was legally unjustified. It noted that gambling was not subject to the standard terms of the Treaty of Functioning of the European Union, due to the potentially harmful nature of the products, allowing German authorities to limit its supply.

According to industry association the Deutsche Sportwettenverband (DSWV) however, this latest ruling has only served to strengthen the need for a new regulatory framework for German gambling.

DSWV president Mathias Dahms explained that the Leipzig ruling does not address the major procedural errors highlighted in an earlier ruling by the Hesse Administrative Court, which ultimately saw the licensing process suspended indefinitely.

"These deficiencies can not be remedied ad hoc," Dahms said. "It is not possible to issue sports betting concessions in the foreseeable future despite this decision of the Federal Administrative Court."

This, he says, means Germany is effectively banning all forms of gambling until these issues are resolved.

"The states should create a licensing procedure that allows all applicants who meet the stringent state quality requirements to be granted approval to operate," Dahms added.